Proof of Stake
The first version of cryptocurrencies were applications based on proof of work (PoW), where
the prover was incentivized with rewards to generate specific computational output that others could verify. This output required substantial computer processing and was thus energy intensive. Beyond extensive energy needs, these early PoW applications were too slow and could not meet the performance demands of newer applications. Rather than earning from PoW, the next generation of network participants in cryptocurrencies earn through proof of stake (PoS). This process allows owners to earn additional cryptocurrency by staking.